Lockdown restrictions mean that some 25% of Pandora’s physical stores worldwide are currently temporarily closed, the company has revealed.
A tightening of rules since the turn of the year has meant the lights have been switched off at hundreds of branches across the globe, including the UK.
On average, around 10% of Pandora’s shops were temporarily shut during the fourth quarter due to Covid-19. But as of this week, that figure has risen to around 25% of its network.
It is the largest amount of store closures the jewellery brand has seen since the height of the first lockdown in March and April last year, when at one stage more than one in every two stores it operated had ceased trading.
According to the most recently available figures, Pandora has 2,689 concept stores and 4,463 other points of sale.
Assuming the percentage of stores currently closed relates to the collective figure, it would account for more than 1,700 sites being shut.
Pandora said the closures and current escalation of Covid-19 would create uncertainty about its 2021 financial performance.
While the reduction in branches presently trading as normal is a blow, there are two key factors working in Pandora’s favour.
Firstly, the negative impact on performance from Covid-19 store restrictions appears to have been offset by a non-recurring positive impact from reallocation of consumer spending away from travelling and services towards gifting and discretionary goods.
Secondly, the huge investments it has made in ecommerce have translated into soaring online sales, with growing numbers of customers now accustomed to purchasing this way.
Appetite among consumers for an in-store shopping experience when retail does fully reopen in markets such as the UK is likely to be high, however.
When stores reopened after the first lockdown, Pandora said consumers generally returned faster than expected. And while overall visits were less than the previous year, the quality of traffic was “better” and led to a materially higher conversion rate.
Unaudited numbers revealed this month suggests Pandora’s overall organic sales fell 11% in 2020 due to Covid-19.
The company also said in the same announcement that sell-out growth in the fourth quarter, including temporarily closed stores, is expected to be around 1%, subject to final review.